The traditional workplace has changed significantly since the pandemic began and with it came a whole new set of challenges. This 3-part series will explore these challenges and discuss their potential modern workplace solutions.
The work from home model, expedited due to the pandemic and various other factors, surprisingly delivered a variety of benefits, making many businesses wonder if they still require physical premises. Questions have been raised regarding how the immediate and distant future of how organizations will operate. Will employees have a choice to work from home or whether being on site will be a must?
Historically speaking, real estate is among the most significant costs to conduct business. However, because of productivity gains, along with excellent employee experience offered because of the move to the remote working model, organizations are now reexamining the very concept of physical workplaces. One would even think that there are no offices in the future, but that remains to be seen and honestly speaking, doesn’t seem practical.
There are certain business sectors that have been reconsidering their stance of office buildings. Various real estate costs, along with commercial leases have been weighing heavily on the balance sheets of numerous companies over the past couple of years. As a matter of fact, only the commercial real estate market’s industrial segment –i.e., logistics, warehousing and factories were relatively unscathed during the pandemic’s economic turmoil in terms of property transactional values, rent and occupancy.
Only a limited number of organizations were able to optimize their physical footprints in regards to productivity, asset sweating, and occupancy per square foot.
What is the Office of the Future?
A large number of CEOs in the United States believe that a massive part of the labor force in the country will continue to work from home and only twenty one percent of organizations predict a future with every employee returning to the office. As everybody slowly but surely moves towards the future of work, many companies contemplate whether having a physical office would be feasible.
Many organizations are recognizing the opportunity for a real estate reset, which is why more and more companies have begun taking steps to downsize.
Over fifty percent of the organizations in the U.S already plan to raise spending to support remote work and more than seventy percent CEOs firmly believe that they do not need too much office space anymore.
What about commercial real estate?
What’s more, for organizations that do not operate in the property market, the recent changes are taking place during a time when the commercial real estate market faces a great deal of pressure without too many alternatives. The only viable solution for them is to work with customers to find solution for their office needs.
While the work from home model is potentially quite exciting for corporate accounting and finance departments, reducing office size in areas with prime commercial real estate or completely relocating to second tier cities for cost efficiency may have a negative impact on the feel and look of even the most iconic cities in the world.
What About Office Buildings
If the future of offices is minimal or no space whatsoever, could New York, Paris and London lose their appeal as they start losing physical businesses. Could the loss of ancillary spaces and landmarks and various other attractions result in less attractive cities to live, visit or work in?
Most property developers would say that they envision co-working spaces and apartment in the future as far as office buildings are concerned. However, spaces like these only become appealing when the demand is equal to the supply, at least.
Unfortunately, the demand is slowly diminishing. The role of corporate offices is vital when it comes to onboarding, training, recruitment and continuing and employee’s professional development. It is also vital for transmitting and reinforcing corporate values and culture.
Could Future Offices Become Similar to Classrooms?
During the early months of 2020, more than ninety percent of North American companies relied on face to face tuition for their development and learning programs. However, businesses had to shift quickly to accommodate a work from home model when the pandemic broke. This hastened the transition to videoconferencing and digital training methods which failed to completely replace in-person interactions.
Think about it, how could a company retrain and upskill their hands-on managers to perform their modern workplace duties at an arm’s length? There is no digital alternative or equivalent of having a quick chat and coffee, or even a short performance review.
Likewise, on the job training is less effective when employees can only connect with colleagues virtually. The popular 70-20-10 learning model highlights that most of professional development and learning is closely linked to exposure with differing professional situations along with getting firsthand look at how co-workers perform certain tasks.
What are modern workplace elements?
Any talk about the future of offices must factor in all of these modern workplace elements. This holds true even when companies primarily use digital channels for their employee training and development programs. Even if businesses are seriously considering work from home models to give employees control over the personal and professional aspects of their lives, having office space will still remain crucial for the long term success of most businesses.
Despite the various benefits that the work from home model offers, an office space demonstrates and instills company values, cultures and helps strengthen employee relationships along with their collective skills. Without the presence of a physical touchpoint like an office, articulating approaches digitally may not be sufficient for helping workforces grow.
Completely moving away from physical offices may actually end up compromising a company’s ability to retain and attract clients. Organizations must keep these things in mind before making impulse decisions and consider maintaining a balance. The best approach would be to let employees work from home for a particular number of days and ask them to work at the office for the rest. Of course, this approach may not be suitable for organizations in every industry, which is why company owners must first give serious thought to what would suit them the most.
The next article in this series will dive deeper into the challenges that managers have to contend with as the modern workplace has changed to adapt to new requirements.
- The future of office space can create financial opportunities https://www2.deloitte.com/us/en/insights/topics/strategy/future-of-office-space-post-covid.html
- Fortune/Deloitte CEO Survey Summer 2021 Highlights https://www2.deloitte.com/content/dam/Deloitte/us/Documents/about-deloitte/us-fortune-deloitte-CEO-survey-summer-2021-highlights-new.pdf
- COVID-19 and L&D: Present and Future https://www.learningguild.com/insights/252/covid-19-and-ld-present-and-future/